...India’s largest private sector companies and is well diversified. It has business units operating in multiple industries including soybean, tobacco, paperboard, retail, hospitality and foods among others (The ITC eChoupal Initiative). Although ITC is extremely profitable and one of the most respected companies in the world, they do face margin issues within their International Business Division (IBD). The IBD is ITC’s exporting agricultural commodities division, which is operated out of India. India’s agricultural sector is home to 72% of the population and 60% of their workforce creating a market with extreme profit potential. However, the 100 million the IBD made in 1998 is a nominal contribution when compared to the 2 billion in revenue ITC collected from all divisions. In March of 1999 Chief Executive S. Sivakumar was approached by ITC Chairman, Y.C. Deveshwar, to generate a new business plan for IBD that would make the division more profitable. There were many factors hindering India’s supply chain for agricultural goods, which would have to be dealt with if the new business model was to succeed. After a brainstorming session with ITC management in May of 1999 Sivakumar decided to implement digital technologies within the supply chain (The ITC eChoupal Initiative). This way the entire supply chain would...
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...ITC E-Choupal Review 1. What was ITC's motivation for creating the eChoupal? ITC's main motivation behind creating eChoupal was to generate more sales in agriculture. The International Business Division (IBD), which was the agricultural division of ITC, was lagging behind other divisions (tobacco, retail, etc.) of the company. IBD had grossed Rs. 450 crore, while other ITC's other divisions had a total of Rs. 7701 crores in sales. ITC also wanted to increase efficiency in various aspects of the agricultural business. For example, farmers did not have access to appropriate tools that may help them achieve the maximum financial benefits. Farmers did not have access to quality inputs (pesticides, herbicides, etc.), or information on weather reports that may help improve their crop quality as well as the process of bringing it into the market. Because of this, farmers lost 60-70% of the potential value of their crop and the yield was only about a third to a quarter when compared to the global standards. ITC wanted to address the entire issue by helping the farmers earn their fair share, and improving the trading service. ITC wanted the farmers to have access to all the information, and have them make decisions on how they wanted to sell their crop. ITC enabled this by creating a Hub is each village which enabled them to attain information relating to weather, crops, best practices, and all their questions could be answered by an expert in the field. 2. What are the old and...
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...system wherein farmers gather at a meeting place at the end of each day to discuss daily happenings. Seeing that soybeans and its derivatives account for two-thirds of ITC’s agricultural export business, his focus was placed on that area. ITC’s supply chain for soybean was from local farmers to mandis to ITC’s factory and this process was significantly hampering the IBD’s performance. The supply chain was suffering from the lack of resources and a reliable channel for information flow, which resulted in a very unproductive cycle. In order to meet the company’s target, it had to identify ways in which a new method could be introduced so that the issues would be corrected. Technology was at the forefront but going that route also had its challenges. It would have been introduced in an environment that was underdeveloped and the general population was not exposed to computer technology. In India where ITC’s corporate offices are located, there is a rich culture and also the industry is governed by politics hence determining a method to effect changes, these factors have to be considered. Historically, the farmers would know happenings in the market place via the Choupals and ITC saw this culture as a good model for introducing the technology they had in mind. ITC introduced its new initiative termed eChoupal. Its main purpose was to gather and share information for the benefit of the farmers...
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...ITC-eChoupal By Group 9: Pradeep Fernandes Shreya Shetty Jenniefer Dias Muneet Narang Navyesh Kambli P Contents: Choupal: Tradition About ITC Traditional supply chain Problems faced by traditional supply chain Problems faced by traditional practices: Discuss the business benefits of echoupal Initiative Discuss the success factors for the ITC Initiative “E-choupal” What are the changes bought in the supply chain through echoupal? Role of samyojak What is the role of technology in their supply chain? Identify Key strategic intentions of the initiative Choupal: Tradition A village of Dahod, Bhopal in India’s central state of Madhya Pradesh was dominated by soybean workers. Followed traditional way of harvesting crops and selling in the local market. The word choupal is a Hindi word which constituted an informal assembly or a meeting place where knowledge could be shared and captured. About ITC: It is a large agricultural export business unit which comprised of various commodities. Two-third of its business consisted of soybean and its derivatives. MP was said to be the “soyabowl” where farmers contributed 4 million of India’s 5 million tons of soybean crop. 80% - soymeal ( high protein extract for poultry) 20% - edible oil (domestic purpose) Current value chain ITC was lagging behind compared to other commodities. Y.C Deveshwar – ITC chairman S.Shivakumar the Chief Executive pondered the choupal concept...
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...1. What was ITC’s motivation for creating the eChoupal? a. What problems (discuss from a data and process focus) does it address? With the development of technological revolution, ITC created the eChoupal. ITC supplied Internet access for remote villages. EChoupal was used to assemble and knowledge and share information through websites. There are many motivations for ITC to create the eChoupal. 1. The revenue of IBD was far behind The First, IBD (the agricultural commodities export division of ITC) was “lagging behind the other divisions of the company” (Upton and Fuller, 2004, p.2). According to the data, IBD grossed $100 million in agricultural commodities sales while ITC’s other divisions such as retail, hospitality, tobacco etc. grossed $2 billion in sales. $100 million was a drop in the bucket compared to the $2 billion. Moreover, India is the second worldwide in farm output. Agriculture plays an important role in the economic development of India. To increase the revenue of the agricultural commodities export division, ITC decided to create the eChoupal. 2. Agricultural supply chain was ineffective The second, soybeans comprised the main of ITC’s agricultural export business, but “both the input and output sides of the agricultural supply chain in India were still far from efficient” (Upton and Fuller, 2004, p.2). Traditionally, ITC had a value chain from procuring soybean from farmers and processing the beans, to exporting the soymeal to other countries such...
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...can be proportionately more important there. The eChoupal case provides a closer look at one such situation. Readings Required: Upton and Fuller, “The ITC eChoupal Initiative”, HBS Case 604016 Optional: Malone, Yates and Benjamin, “Electronic Markets and Electronic Hierarchies”, Communications of the ACM, 1987. Sachs “The Digital War on Poverty” Project Syndicate. http://www.project- syndicate.org/commentary/sachs144 URLs: https://www.mturk.com/mturk/welcome http://en.wikipedia.org/wiki/Amazon_Mechanical_Turk Study Questions Please think about the following questions as you do the readings. 1. What was ITC's motivation for creating the eChoupal? 2. What were the old and new physical flows and information flows in the channel? 3. What principles did it employ as it built the newly-fashioned supply chain? 4. What barriers did ITC face in embarking on this project? 5. How should ITC develop this platform for the future? Is it sustainable? 6. Are you optimistic or pessimistic about the prospects of the “Digital War on Poverty” as described by Jeffrey Sachs? Why? Required Assignment “One Pager” for Emerging Electronic Markets Class Please submit a one page memo addressed to Jeffrey Sachs, Director, Earth Institute, (max 300 words) by 9pm the day before Session 22. Please submit either a PDF or MS Word file, with your name, date and assignment title at the top. Question: eChoupal uses relative simple technologies to connect poor...
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...ITC eChoupal Initiative 1. What was ITC’s motivation for creating the eChoupal IBD as a division of ITC was the agricultural commodities export division and in March 1999 it was clear that it was lagging behind other divisions in the company. What could be done? The main crop that IBD was responsible for was Soybean, one of the causes of the lag behind other divisions was the inefficiencies in the supply chain network of the industry. By creating the eChoupal ITC would attempt to help create a more efficient and profitable supply chain model than the mandi model. 2. What are the old and new physical flows and information flows in the channel? In the Mandi Model: information was available to the farmer by either the government, town centre talk or yesterdays prices from the Mandi. Physcially product was moved from the farm across the region to the Mandi (auction) and then taken to the buyer for either export or processing. In the eChoupal model, an internet capable computer was set up with access to a website that provided industry specific information regarding industry transactions and prices as well as regionalized weather reports and information sharing such as best practices. Physically product was moved from the farm direct to the buyers (ITC) facilities. Farmers could also by product from the ITC through the eChoupal which allowed them to get these items without goiung to town etc. 3. What principles did ITC employ as it built the newly fashioned...
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...minded focus on value creation for the consumer through significant investments in product design, innovation, manufacturing technology, quality, marketing and distribution. All initiatives are therefore worked upon with the intent to fortify market standing in the long term. This in turns aids in designing products which are contemporary and relevant to the changing attitudes and evolving socio economic profile of the country. This strategic focus on the consumer has paid ITC handsome dividends. ITC's pursuit of international competitiveness is reflected in its initiatives in the overseas markets. In the extremely competitive US market, ITC offers high-quality, value-priced cigarettes and Roll-your-own solutions. In West Asia, ITC has become a key player in the GCC markets through growing volumes of its brands. ITC's cigarettes are produced in its state-of-the-art factories at Bengaluru, Munger, Saharanpur, Kolkata and Pune. These factories are known for their high levels of quality, contemporary technology and work environment. ITC Limited (BSE: 500875) or ITC is an Indian public conglomerate company headquartered in Kolkata, West Bengal, India.[1] Its diversified business includes four segments: Fast Moving Consumer Goods (FMCG), Hotels, Paperboards, Paper & Packaging and Agri Business. ITC's annual...
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...the negative connection of tobacco with poor health and premature death. To fund its cash guzzling FMCG start-up, the company is still dependant upon its tobacco revenues. Cigarettes account for 47 per cent of the company's turnover, and that in itself is responsible for 80% of its profits. So there is an argument that ITC's move into FMCG (Fast Moving Consumer Goods) is being subsidised by its tobacco operations. Its Gold Flake tobacco brand is the largest FMCG brand in India - and this single brand alone hold 70% of the tobacco market. Opportunities Core brands such as Aashirvaad, Mint-o, Bingo! And Sun Feast (and others) can be developed using strategies of market development, product development and marketing penetration. ITC is moving into new and emerging sectors including Information Technology, supporting business solutions. e-Choupal is a community of practice that links rural Indian farmers using the Internet. This is an original and well thought of initiative that could be used in other sectors in many other parts of the world. It is also an ambitious project that has a goal of reaching 10 million farmers in 100,000 villages. Take a look at eChoupal here http://www.itcportal.com/agri_exports/e-choupal_new.htm ITC leverages e-Choupal in a novel way. The company researched the tastes of consumers in the North, West and East of India of atta (a popular type of wheat flour), then used the network to source and create the raw materials from farmers and then blend them...
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...dimensions to have achieved the global environmental distinction of being Carbon positive (10th Year), Water positive (13th Year) and Solid waste recycling positive (8th Year) 2 ITC Performance Track Record Rs. cr. 1995-96 2014-15 19-yr Cagr 95-96 to 14-15 Gross Revenue 5,115 49,965 12.7% Net Revenue 2,536 36,083 15.0% PBT 452 13,998 19.8% PAT 261 9,608 20.9% Capital Employed 1,886 32,420 16.1% ROCE % 28.4 43.4 Market Capitalisation 5,571 2,60,865 Total Shareholder Returns % 22.4% 24.3% Market Cap and TSR based on FY-end prices for FY96 and FY15 Consistent performance across time horizons Sensex (CAGR 95-96 to 14-15) : 11.8% 3 ITC’s ranking Amongst all listed private sector cos. PBT: No. 7 PAT: No. 7 Market Capitalisation: No. 3 Note: Based on Published Results for Q3 FY15, Market Capitalisation based on 31st Mar 2015 4 Awards & Accolades (1) ITC is the only Indian Company rated amongst the Top 10...
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...SAJMMR Volume 1, Issue 3 (December, 2011) ISSN 2249-877X Pu b l i s h ed b y : S o u th As i a n Aca d e m i c Re s ea r ch J o u rn a l s SAJMMR: South Asian Journal of Marketing & Management Research RURAL RETAIL REVOLUTION: THE RISE OF RURAL MARKET ASHISH GUPTA* *Research Scholar, School of management Studies, Motilal Nehru National Institute of Technology, Allahabad, India. ABSTRACT “The future lies with those companies who see the poor as their customers." C. K. Prahalad Strategic Guru Rural India is characterized by low per capita income, low productivity, low literacy and low rate of industrialization along with absence of basic amenities. The unprivileged class is set back by a lack of educational opportunities that could empower them to confidently pursue economic progress and overcome the debilitating effects of low literacy and rigid social hierarchies. The Indian rural retail opportunity is currently estimated to be in excess of Rs. 1400 billion (approximately US$34 billion). The figure is likely to touch Rs. 1800 billion (approximately US$ 43 billion) in 2010 and go up to Rs. 2400 billion (approximately US$ 58 billion) by 2015, according to CII - YES BANK Study on the Rural Retail Sector15. India’s rural markets are growing at double the rate of urban markets. The retail revolution is going to act as a catalyst. So, the new concept that is hitting the market today is the "Rural Retailing". KEYWORDS: Rural India, Rural retail, rural market, Retail revolution...
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...MIS (Spring 2007) Information Systems Theory and Practice Professor: Professor Jason C.H. Chen, Ph.d. Class time: Tuesday (February 27 – June 16) E-mail: chen@jepson.gonzaga.edu URL: http://barney.gonzaga.edu/~chen Office: to be announced Office hour: to be announced and by appointment Required text: 1. Pearlson, K.E. and Saunders, C.S, Managing and Using Information Systems, Wiley, 2006 (3nd edition) 2. A package of Harvard Business School Case Studies Additional Readings and Cases: Class handouts as needed. Course Description and Goals This course is designed to provide the current and future managers with understanding and appreciation of the issues that are related to the organization’s information technology assets. The course is not to educate technical specialists, rather, it is to give students a managerial perspective on the use of, design of, and evaluations of information systems that exist in organizations today. The objective of this course is to prepare students to manage information services in both today’s and tomorrow’s environment with its managerial, social, political, ethical and global issues. Conduct of the Course All students are expected to read the assigned materials (text, end-of-chapter discussion board questions (DBQ) and Harvard Business School case studies- HBC) before coming to the class. Some days we will discuss the materials in the text book. You are expected to be prepared...
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...| E-VOLUTION: TECHNOLOGY AS A DRIVER OF RURAL RETAIL IN INDIA – A CASE OF ITC’S FORAY INTO THE RURAL MARKET. | Ms Smita Singh, Research Scholar, Department of Business Administration, University of Lucknow, Lucknow(M) 098395-01035e-mail: smita_saggi@rediffmail.com | Ms. Smita Singh Ms. Singh is a visiting faculty at Institute of Management Sciences, University of Lucknow and Distance Learning Centre for Punjab Technical University. She has been associated with academics for the past 2½ years and is enrolled for PhD research at the Department of Business Administration, University of Lucknow. She has worked with Wigan and Leigh College, Lucknow as Programme Manager and Academic Head, Management. A NTSE (NCERT) and HRD Ministry scholarship holder, she has qualified SLET in Anthropology. With over 8 years of industry experience, her current affiliation as Human Resource Consultant is with the Lucknow based project centre of Johns Hopkins University of Public Health and Hygiene, which she earlier served for 4 years as Manager HR and Research Associate. DECLARATION I hereby declare that the paper/case is original and is authored by me. The paper/case has not been published elsewhere ABSTRACT E-VOLUTION: TECHNOLOGY AS A DRIVER OF RURAL RETAIL IN INDIA – A CASE OF ITC’S FORAY INTO THE RURAL MARKET. 70 % of India's population lives in rural areas in its 627000 villages...
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...The sector overview and Major players The Indian Pharmaceutical industry is highly fragmented with about 24,000 players (around 330 in the organised sector). The top ten companies make up for more than a third of the market. The Indian pharma industry (IPM) grew by 16% YoY in 2012 to ` 629 bn. It accounts for about 1.4% of the world's pharma industry in value terms and 10% in volume terms. Besides the domestic market, Indian pharma companies also have a large chunk of their revenues coming from exports. While some are focusing on the generics market in the US, Europe and semi-regulated markets, others are focusing on custom manufacturing for innovator companies. Biopharmaceuticals is also increasingly becoming an area of interest given the complexity in manufacture and limited competition. The drug price control order (DPCO) continues to be a menace for the industry. There are three tiers of regulations – on bulk drugs, on formulations and on overall profitability. This has made the profitability of the sector susceptible to the whims and fancies of the pricing authority. In connotation, with pricing policy of 354 drugs, NLEM (National list of essential medicines) was released, which covered the list of the drugs which the authority intends to put under price control. The policy has been stiffly opposed by the pharmaceutical industry. Introduction of GDUFA (Generic drug user fee Act) in US. As per this act, the generic companies are required to pay user fees to USFDA, for...
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...individuals belonging to these sections of society has proved an elusive goal. During the 1980s and early 1990s, initial attempts towards e-Governance were made with a focus on networking government departments and developing in-house government applications in the areas of defence, economic monitoring, planning and the deployment of IT to manage data-intensive functions related to elections, census, tax administration etc.80 These applications focused on automation of internal government functions rather than on improving service delivery to citizens. Over the past decade or so, there have been islands of e-Governance initiatives in the country at the national, state, district and even block-level. Some of them have been highly successful and are suitable for replication. A need was therefore felt for taking a holistic view of the several e-Governance initiatives implemented across the country. It was increasingly perceived that if e-Governance was to be speeded up across the various arms and levels of Government a...
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